Gov’t expenditure cuts haven’t made any significant impact on economy – Gatsi

The Dean of the University of Cape Coast Business School, Prof John Gatsi, has disclosed that the government’s expenditure cuts for 2024 have not made any significant impact on the economy.

Prof Gatsi’s comment follows a recent reaction to former President John Mahama’s criticism of the government for failing to cut expenditures.

However, Vice President Dr Mahamudu Bawumia has insisted that the government cut down expenditure and effectively managed the economy amidst external challenges.

Prof Gatsi acknowledged a slight reduction in expenditure in some areas recently but said they were insufficient.

In an interview, he noted, “For this particular one, it is not very clear the impact of that particular reduction in expenditure that the government is talking about.”

Professor Gatsi added that the current reduction has not had an impact, particularly when compared to past instances where expenditures were reduced during challenging times by cutting the salaries of certain key ministers.

He emphasised the need for a broad reduction in expenditure to free up more physical space for the economy.

Professor Gatsi stressed the importance of increasing revenue without causing disruptions to the business environment as the required approach.

“But while we are doing this, we are disrupting the business environment, and that is putting more burden on people, so that is not the best way to approach it, so there should be a balance in all these measures that are taken.”

In 2023, the government assured Ghanaians that it would safeguard current economic gains and reflect them in everyone’s living conditions in the coming months.

To this end, it said there would be more expenditure reduction measures in the 2024 budget, as well as policies to consolidate macroeconomic gains, ensuring that inflation and exchange rates are tamed.